Olongapo SubicBay BatangGapo Newscenter

Monday, October 23, 2006

GMA acts to prevent return of blackouts

THE business community has urged President Gloria Macapagal Arroyo to create a committee to remove the threat of a power shortage and the rolling blackouts that could result from it.

Business leaders told the President in a position paper that a crisis committee must be created to monitor the energy situation and assure domestic and foreign investors of enough electricity to power their businesses.

“The crisis committee must come up with a report or pronouncement of assurance every six months so that businesses will not become jittery over the threat of power shortages,” the paper says, adding the group must be formed within the year.

They also suggested that the crisis committee be composed of representatives from the Department of Energy, Philippine Electricity Market Corp., which runs the wholesale electricity spot market, and National Power Corp.

Energy Secretary Raphael Lotilla said his department was seriously considering the suggestion. He said the government was intensifying its efforts to privatize Napocor’s assets to raise funds to build power plants over the next four years.

“That was the sentiment of our business leaders, and this government has always been open to hearing their suggestions. We are doing everything to make sure we have sufficient energy,” Lotilla said.

A department study shows that the Philippines will be energy sufficient only until 2010, and Mindanao will be the first to live in the dark followed by Luzon and the Visayas if nothing is done to produce more electricity.

“Given the present dependable capacity and committed projects, power supply will become critical in Luzon in 2010, in the Visayas in 2011, and in Mindanao in 2009,” he Lotilla said.

“Contingency plans have to be set in place immediately considering that it takes at least four years to construct major power plants.”

Presidential Spokesman Ignacio Bunye said Mrs. Arroyo was confident there would be blackouts.

“We have enough energy supply and we assure the public that this will be maintained in the coming years,” he said, adding the power supply would be enough despite the coming repair work on Malampaya’s natural gas platform in Palawan.

Malampaya supplies natural gas to the gas-fired 1,200-MW Ilijan plant and the 1,500-MW Sta. Rita/San Lorenzo plant in Batangas, and its closure for 25 days in November will deprive Luzon of 2,700 megawatts of electricity from those plants.

The 1,200-MW Sual power plant in Pangasinan has been operating at half capacity and will continue to do so until March 2007.

The business leaders also asked the government to consider lowering the expanded value added tax on energy and oil and petroleum products to 5 percent from 12.

According to Philippine Chamber of Commerce and Industry president Donald Dee, lowering the tax will reduce power costs by as much as 60 centavos a killowatt hour, but the energy department has been lukewarm to his suggestion.

“From the standpoint of the Bureau of Internal Revenue, it would be very difficult to administer a multi-tiered VAT system, so I don’t think we can do that,” Lotilla said.

He said his department had signed an agreement with the Lopez-owned Manila Electric Co. for an “open access program” that would make electricity cheaper.

“This Customer Choice Program of Napocor and Meralco will result in the immediate reduction in energy costs for some 500 industrial firms with at least 1 megawatt consumption,” he said.

“The time-of-use rates given to these firms will be lower since they will shift their power intensive consumption time to the off-peak period.”

Lotilla said industrial firms could save at least 44 centavos per kilowatt-hour and as much 77 centavos per kWh under the off-peak rate program.

He also announced that guidelines were now being prepared for the special power rates to be implemented in the economic zones and free ports such as Subic and Clark. By Joyce Pangco Pañares - Manila Standard Today


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